Banxico seen holding at 6.50% through 2027 – Citi Mexico Survey

On October 20, Citigroup Mexico released its survey, in which most private economists shared their expectations for Mexico’s economy.

Banxico to hold rates; USD/MXN forecasts upward revised

Regarding the Bank of Mexico – also known as Banxico – the central bank is expected to hold rates at 6.50% “through the end of 2027, with few participants anticipating any move.” For the end of 2026, the median forecast puts Mexico’s main interest rate reference at 6.50%, but for 2027, estimates range from 6% to 7.25%.

Meanwhile, the USD/MXN exchange rate is expected to be at 18.20 towards the end of 2026, up from 18.00 in the previous survey. For 2027, the USD/MXN is expected to end at 18.60, “with expectations ranging from 17.00 to 19.80.”

Of note, at the time of writing, the exotic pair trades at 18.64, an indication that the carry trade continues to wane.

Regarding inflation, towards year-end, headline inflation is forecast at 3.90%, unchanged from the previous poll. Underlying inflation is expected to decrease from 3.88% to 3.80%. For 2027, the headline inflation was revised upwards from 3.83% to 3.86%, and the core reading is projected to remain unchanged at 3.80%.

Expectations for Mexico’s Gross Domestic Product (GDP) for the end of 2026 were kept unchanged from the previous poll at 1.4%. For 2027, the median projection is for the economy to grow 1.8%, with projections ranging from 1% to 2.1%.